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Decision on pension cuts expected in November

A decision on whether or not Greece will be obliged to implement fresh pension cuts in January will not be taken until a summit of eurozone finance ministers in November, it emerged yesterday as representatives of Greece's creditors met with government officials in Athens.

According to a government official cited by the Athens-Macedonia news agency, Finance Minister Euclid Tsakalotos and his alternate minister Giorgos Houliarakis noted that Greece's "fiscal space" next year will be larger than the 700 million euros predicted by the mid-term program.

This could result in the cancellation of planned pension cuts and allow the implementation of certain other social benefits, according to the source.

"The government can enforce the counter-measures over the next four years, something that will offer more fiscal breathing space," the official added.

The fact that none of the foreign envoys described the pension cuts as a structural reform was "a pleasant surprise," the official said.

Talks focused on the fiscal impact of such a measure with the government insisting that its non-enforcement would not cause Greece to deviate from a primary surplus target of 3.5 percent of gross domestic product for 2019.

In any case, the official said, decisions will be taken at the next Eurogroup summit in November.

Envoys are to continue their talks with government officials on Thursday, focusing on labor rights, non-performing loans, privatization and the energy sector.

A final day of talks on Friday with focus on the broader budget after which the auditors will depart and start preparing their reports.